Eight potential buyers of Nama’s vast Northern Ireland loan book were prevented from entering the bidding process even though they had expressed interest in doing so, a parliamentary report has revealed.
The sale of the loans – known as ‘Project Eagle’ – has been the subject of several parliamentary investigations and an ongoing criminal investigation by the National Crime Agency (NCA).
Yesterday the Dail’s Public Accounts Committee (PAC) published a 100-page report after a lengthy process of public hearings involving many of those involved in the deal.
The report finds that Irish taxpayers lost more than £162 million in the sale of the loans – which had been taken on by the state after it bailed out Irish banks during the financial crash – because the process behind the deal was “seriously deficient”.
Project Eagle was sold to US investment fund Cerberus for £1.1 billion in June 2014.
Yesterday’s report records that after a newspaper article on February 13 2014, details of what was supposed to have been a confidential sales process became public.
At that point, two further major investment managers – Fortress and Goldman Sachs – approached Nama expressing interest in buying the loans. Both of them were allowed to bid.
However, the report finds that another eight potential bidders were interested but only Fortress and Goldman Sachs were “allowed to enter the process”.
Lazard, the firm advising Nama on the sale, told Nama that it had excluded the eight firms, seven of whom it said were “well known to Lazard and had excellent reputations”.
Lazard argued at the time that “it believed that the six bidders then in the process would generate sufficient competition and, therefore, it did not intend to admit any further bidders”.
The report also found that Nama’s failure to take Frank Cushnahan off its Northern Ireland advisory board was “a failure of corporate governance”.
Mr Cushnahan had declared to Nama that he was working for multiple Nama debtors, but the Republic’s ‘bad bank’ allowed him to continue in his role, something the PAC said was the wrong decision.
Mr Cushnahan, who was close to the then first minister, Peter Robinson, has not given evidence to any of the parliamentary inquiries. The Stormont inquiry repeatedly vowed that it would use its powers to compel him to attend but ultimately backed down.
The report also found that key elements of the sale were influenced by one of the bidders, US firm Pimco, and the most active participants in the market for non-performing loans were not initially invited to compete.
The PAC report said: “The sales strategy pursued by Nama included restrictions of such significance that the strategy could be described as seriously deficient.
“Nama has been unable to demonstrate that by pursuing such a strategy that it got value for money for the Irish State in relation to the price achieved.”